A war we can’t af­ford

CityPress - - Voices -

Min­eral Re­sources Min­is­ter Mosebenzi Zwane has hailed the new Min­ing Char­ter as a “rev­o­lu­tion­ary tool” that will trans­form the econ­omy and boost growth and investment.

The Cham­ber of Mines, which rep­re­sents 90% of the in­dus­try, char­ac­terised the process lead­ing up to the re­lease of the char­ter as “se­ri­ously flawed” and re­jected its “un­work­able tar­gets”. The cham­ber is now head­ing to court to in­ter­dict the im­ple­men­ta­tion of the char­ter.

While wel­com­ing some as­pects, the Na­tional Union of Minework­ers slammed the in­clu­sion of black nonSouth Africans as po­ten­tial BEE ben­e­fi­cia­ries, an el­e­ment clearly aimed at ac­com­mo­dat­ing the Gup­tas.

The only group­ing that gave the char­ter un­qual­i­fied en­dorse­ment was the Umkhonto weSizwe Mil­i­tary Vet­er­ans’ As­so­ci­a­tion which – like Zwane – is in the Gupta kraal.

The mar­kets re­acted to the an­nounce­ment of the char­ter vi­o­lently, wip­ing R30 bil­lion off the JSE’s min­ing stocks in no time. The rand, which had been on steady re­cov­ery on the back of ex­ter­nal fac­tors, took a 2% knock. Econ­o­mists warned of fur­ther dam­age to the econ­omy, which en­tered a re­ces­sion last week. Fur­ther­more, the an­nounce­ment is bound to fuel neg­a­tive sen­ti­ments, which was ev­i­denced by the plunge in the RMB/ BER busi­ness con­fi­dence in­dex, which fell to its low­est lev­els since the af­ter­math of the 2008 global crash. Ac­cord­ing to RMB/BER and the SA Re­serve Bank, this is the long­est pe­riod of busi­ness since the five years pre­ced­ing the 1994 demo­cratic break­through.

The ur­gent chal­lenge then is to boost con­fi­dence and get the en­gine of the econ­omy to purr just a lit­tle.

Fi­nance Min­is­ter Malusi Gigaba said as much on Thurs­day when he said the coun­try needed to move speed­ily in com­ing up with an “ac­tion plan that deals with boost­ing busi­ness and con­sumer con­fi­dence”. But if his col­league has his way, this is un­likely to hap­pen. An un­com­pro­mis­ing Zwane said this week that “the but­ton has been pressed ... there’s no turn­ing back”.

The can­nons are loaded in prepa­ra­tion for a war the South African econ­omy can ill-af­ford.

The trans­for­ma­tion im­per­a­tives are no­ble. No one can ar­gue with the fact that 23 years into democ­racy the com­plex­ion, struc­ture, cul­ture and val­ues of the min­ing in­dus­try should be very dif­fer­ent. Even the in­dus­try it­self – al­beit be­lat­edly – has con­fessed to its sins of the past and is on a path of ir­re­versible change.

But Zwane’s bona fides as cham­pion of trans­for­ma­tion is hugely sus­pect. In his 18 months in of­fice his pri­mary mis­sion has been to em­power and pro­tect the Gup­tas. Zwane’s char­ter is a pop­ulist project that is not based on any con­vic­tion about trans­form­ing the South African econ­omy. It is a scorched earth strat­egy, de­void of thought and fore­sight.

If the pres­i­dent and the fi­nance min­is­ter are se­ri­ous about restor­ing busi­ness con­fi­dence and reignit­ing the econ­omy, the first step should be to avert the loom­ing war.

They must im­me­di­ately rein in Zwane and com­pel him to com­mit to a new gen­uine process of con­sul­ta­tion.

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